Debt Ceiling Angst: How to Protect Your Savings

Experts say 'sit tight' and have a cash reserve

"The key to investing is to be proactive and not reactive," says Frank Jaffe, a certified financial planner at Access Wealth Planning in Roseland, N.J. "To try to make major adjustments now to a portfolio doesn't make sense unless a portfolio is overly risky to begin with," he says.

"Doing nothing may not sound like you're on top of things, but your portfolio should already be set up to reflect the amount of risk you're willing to take."

Kevin Cook, a senior stock strategist at Zacks Investment Research in Chicago, says he's bullish on the stock market, despite the situation. He doesn't expect Wall Street to give up gains even if the government loses its top credit rating.

Cook emphasizes that corporate profits are strong, signaling that there are good investment opportunities. His top picks are companies that invest in rapidly growing countries, for example, China, Brazil and India.

"The development in emerging economies is driving profits for U.S. companies," Cook says. "Even people in their 50s and 60s want to maintain exposure to equities. Interest rates are still really low so cash is still trash" — meaning that assets such as savings accounts have very low returns.

He predicts that managers of large portfolios, including pension and insurance funds, will continue investing in equities, and the stock market will likely prosper.

If you're a conservative investor, Michael Davis, president of Davis Financial Services in Jacksonville, Fla., recommends fixed annuities and dividend-paying stocks so that you will still be earning money even if stock values fall.

"Fixed annuities have made it through the test of time; they made it through the Great Depression," he says. "The ups and downs of the market are tough on us the closer we get to retirement, so the 6 or 7 percent rate that's guaranteed for 20 or 30 years [through income riders attached to fixed indexed annuities] can create a pension for a person to draw on."